Work Opportunity Tax Credit
WHAT IS THE WORK OPPORTUNITY TAX CREDIT (WOTC)?
The WOTC is one tool in a diverse toolbox of flexible strategies designed to help move people from welfare into gainful employment and obtain on-the-job experience. It joins other tax credits, education, and workforce training programs that help American workers with barriers to employment prepare for good jobs; ease their transition from job to job; benefit from the creation of effective regional economic development strategies; and create high performance workplaces.
WHAT’S NEW: The changes introduced by P.L. 109-432- apply retroactively to individuals who began to work for an employer after December 31, 2005. They are as follows:
the earnings test for ex-felons was eliminated;
the maximum age for food stamp recipients was increased;
the certification request filing deadline was increased;
the welfare-to-work provisions were merged into the WOTC
The consolidated WOTC for hiring most target group members can now be as much as;
$2,400 for each new adult hire;
$1,200 for each new summer youth hire,
$4,800 for each new disabled veteran hire, and
$9,000 for each new long-term family assistance recipient hired over a two-year period.
WHAT NEW HIRES CAN QUALIFY EMPLOYERS FOR THE WOTC?
The new employee must belong to one of the following nine WOTC target group:
Long-term TANF Recipient.
Other TANF Recipient.
Qualified Food Stamp Recipient.
Designated Community Resident.
Summer Youth Employee.
Vocational Rehabilitation Referral
Qualified Ex-Felons. An individual who has been convicted of an felony and has a hiring date which is not more than one year after the last date on which he was so convicted or released from prison;
For more information visit IRS Form 8850, the Work Opportunity Tax Credit Pre-Screening Notice and Certification Request, and its instructions, or download from http://www.irs.gov.